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Stanford Issues Novel Sustainability Bonds

The university says it’s the first higher-ed institution to issue bonds to reduce its adverse impact on the climate, which it plans to use to start a school focused on the environment.
By Michael Katz


Stanford University sold $375 million in environmental, social, and governance (ESG)-related public market debt securities in April to help finance various projects in the university’s capital plan. The university says the sale marked the first time a US college or university has issued bonds carrying dual climate and sustainability designations for financing campus construction and renovation projects.

The university said the securities are in the emerging ESG investment category and have been externally verified by the International Capital Markets Association’s sustainability bond designation and the Climate Bond verification, both of which are based on the United Nations’ Sustainable Development Goals (SDGs).

“This combination of bond designations represents a first, not only for Stanford but for US higher education,” Stanford President Marc Tessier-Lavigne said in a statement. “We recognize that we must operate by the same rigorous standards that we apply to research and scholarship, as we work to advance solutions to the urgent needs of our planet and society.”

Oregon-based financial consultant Kestrel Verifiers conducted an independent review that determined whether Stanford’s programs met the standards required for the bond designations.

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“The projects that Stanford will finance with the bonds clearly support the advancement of health equity, improve access to housing in an undersupplied market, and sustain the entire university’s diversity and equity goals,” Kestrel CEO Monica Reid said. Reid added that the projects will help Stanford reduce greenhouse gas emissions “at a rate that exceeds internationally recognized climate action goals.”

Stanford said the new projects include a new school that will focus on climate, sustainability, and Sustainable Stanford, the university’s effort to reduce its environmental impact. The school will leverage Stanford’s climate and sustainability research, will include faculty in core departments, and will run degree-granting programs for undergraduate and graduate students.

The school is also intended to include a so-called “sustainability neighborhood” that would provide place-based education and infuse sustainability in the education of its students. Additionally, it will include an accelerator to drive new sustainability solutions through external partnerships with government, industry, and nongovernmental organizations.

Stanford’s long-term sustainability goals include committing to use 100% renewable energy sources and to have greenhouse gas emissions levels at 80% below peak by 2025, as well as producing zero waste by 2030. It said it will reach its 80% greenhouse gas reduction goal three years ahead of time when a new solar facility comes online in 2022.  

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Home > News > Pensions > UK Parliament Launches Pension Industry Climate Inquiry
Pensions

UK Parliament Launches Pension Industry Climate Inquiry

A committee seeks to examine government’s pension stewardship ahead of COP26 climate conference.

By Michael Katz


The UK Parliament’s Work and Pensions Committee has launched an inquiry into the British government’s approach to making sure pensions consider climate risk and the role plans can play in meeting greenhouse gas reduction targets.

Based on a now-closed consultation issued at the beginning of the year, the UK government is expected to issue regulations this summer for pension plans on how to manage climate risk before the COP26 climate conference—formally known as the 2021 United Nations Climate Change Conference—in Glasgow, Scotland, in November. The summit is intended to bring together countries to work toward achieving the goals of the Paris Agreement and the UN Framework Convention on Climate Change (UNFCCC).

The committee’s inquiry is examining the government’s approach to pension plan stewardship, how it compares to approaches taken by other countries, and how pension funds can be supported to make environmentally friendly investment decisions. It will also look into how the UK government can inform and learn from the COP26 conference and how it ensures trustees consider risks posed by climate change to pension funds, while also helping support new green technology.

“Pension schemes will undoubtedly want to consider the impact climate change and the measures to cut emissions will have on their portfolios,” Stephen Timms, a member of Parliament and the chair of the Work and Pensions Committee, said in a statement. “Unless they are wise to the risks and the need to adapt investments, there will be a knock-on effect on people’s pension pots.”

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In March, Parliamentary Under-Secretary of State for Pensions and Financial Inclusion Guy Opperman said, “We will lay these world-leading regulations this summer to come into force ahead of COP26.” Opperman boasted that the UK would be the first major economy in the world to “legislate for, and bring into practice, the recommendations of the Taskforce on Climate-Related Financial Disclosures [TCFD], ensuring climate change is at the heart of the pensions system.”

The committee is seeking views on six questions:

  • How should pensions contribute to setting COP26 targets and help reach those targets?
  • What role should international standards have in aiding pension plans in assessing climate change risks when considering what investments to make?
  • Are there suitable financial products that allow pension funds to make climate-conscious investments, and how should those investments be facilitated and supported?
  • How should the UK share and learn from international best practices?
  • What regulatory changes or other government action has been the most effective in bringing change in the UK, and what changes implemented by foreign governments should the UK learn from?
  • Do pension plans have suitable information to assess climate risk, or are international financial reporting reforms necessary?

    The deadline for public submissions to the inquiry is June 18.

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